The Federal Reserve has indicated it may raise interest rates by half a percentage point next month and begin reducing its $9 trillion asset portfolio, a double barrel to remove stimulus to curb price pressure. Attempt.
Fed Chairman Jerome Powell will have an opportunity to reinforce that signal when he speaks in his last scheduled public appearance on Thursday afternoon ahead of the central bank’s policy meeting, May 3-4.
Mr Powell is scheduled to participate in a panel discussion organized by the International Monetary Fund, where he is set to be joined by European Central Bank President Christine Lagarde.
Mr. Powell indicated last month that a half-point rate hike was possible at the Fed’s upcoming policy meetings, and since then, his top lieutenants on the central bank’s rate-setting committee have lowered interest rates to half-point rates in future markets. has confirmed the expectations. Increase in May’s gathering.
The Fed raised rates at its meeting last month to near zero by a quarter percent, its first rate hike in more than three years. Fed officials, including Governor Lyle Brainard, who awaits Senate confirmation to serve as vice president of the central bank, have almost unanimously signaled a desire to raise rates faster in a more neutral setting that now does not provide incentives. New York Fed Chairman John Williams said last week that a half-point increase in May was a “very reasonable choice”.
A rate hike next month will mark the first time since 2006 that the central bank has increased its policy rate in back-to-back meetings, and a half-point increase since 2000 would be the first such step.
The Labor Department is set to report April 29 on the widely watched measurement of labor costs during the first quarter. Economists at JPMorgan Chase & Co. forecast a separate release by the Commerce Department of the Fed’s preferred inflation gauge, also on April 29, would show that core prices, which excluding volatile food and energy commodities, remained unchanged for the year through March. grew 5.3% in the U.S., down from their 12-month growth of 5.4% in February.